Trump’s trade tactics vary between two terms
The agriculture industry has faced two quite different Donald Trumps when it comes to U.S.-Canada trade negotiations .
Shaun Haney, founder of RealAgriculture, said in a recent presentation at the MNP Ag Connections Conference in Medicine Hat that the U.S. president Trump was more like his Art of the Deal during his first term in office but has ventured off to Robert Lighthizer’s No Free Trade in his current term.
Why It Matters: Trade negotiations with the United States are high stakes with Canada.
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“The first Trump administration was art of the deal. It was the master negotiator. They renegotiated the NAFTA agreement. Now we have the USMCA agreement,” Haney said.
“But Trump 2.0 of the Trump administration is different. This really clearly explains the ideological mission that they are on in terms of reshoring, bringing manufacturing back to the U.S.… One of the big differences in this Trump administration, which I think closes a bit of a loophole for a country like Canada, is not everybody was on the same team. In the first Trump administration, Canada was able to take advantage of people that were in cabinet that were more sympathetic to Canada’s cause or Mexico’s cause. This cabinet is much more loyal.”
Haney said he has stopped updating his slides on his presentations about U.S. tariff rates, given how the landscape seems to change on a constant basis. What could be 25 per cent today could be 10 per cent tomorrow, where the agriculture industry just wants some consistency going forward and budget accordingly.
“You talk to a lot of Canadian ag manufacturers, they will tell you, ‘just tell me what the tariff is going to be. If it’s going to be 10 per cent, like, let’s just go stop with this craziness and uncertainty,’ and I hear the same thing from U.S. manufacturers.”
With Canada forced to pivot in trade negotiations, Haney stressed that industry has to look at why the U.S. is pressing its tariffs.
If it is from a revenue perspective, the lofty promises Trump is making of paying down debt, offering more farm subsidies, giving Americans $2,000 dividends and abolishing federal income tax would not be viable. However, applying a 13 per cent tariff on all non-Canada-U.S.-Mexico Agreement exports into the United States would be equivalent to no federal income tax for everybody earning less than $75,000
What is more likely is that many geo-political pundits have concluded that it is a tactic for future negotiation of CUSMA in 2026.
Trump has tried to break it up into several separate bilateral agreements with Mexico and Canada and has also voiced his displeasure about the dispute resolutions mechanisms that were put in place with CUSMA. Lowering or taking off tariffs can be seen as a carrot in order to get other concessions.
“They lost the dispute resolution panel twice, both on dairy (Bill 202), and they don’t like it. They want to get rid of the dispute resolution panels, and they want themselves to be the dispute resolution mechanism,” said Haney.
He said current talk of diversifying trade away from the U.S. is a troubling trend.
”There’s not enough business to go around all those other markets to make up for the deficit that not doing business with the U.S. would create. The Carney government, I believe, firmly knows this. I think the realistic situation, what’s going to happen here, is we’re going to end up doing more business with the U.S. going forward than less,” said Haney.
“There’s going to be much more of a push for a firmer integrated market between Canada, Mexico and the U.S. to combat the lack of success that Canada and the U.S. and Mexico are having with China and India. At one time, the polarity of the world ran through the U.S., and that has changed. China and India are larger powers. So countries like Canada and Mexico are being forced much more to choose a side, who they are going to have more of a relationship with. For Canada, it would seem awkward to choose China, being adjacent to the U.S., and so that’s likely more of a reality where we end up.”
Source: producer.com